System 1: a system for recording an image of a location at a given place over time.

System 1 can refer to the dashcam or the mk1 eyeball + notepad in your example.

System 2: a system for tracking the presence of a person across both time and location

An example of system 2 would be the facial id system being trialled on the london underground currently.

These are a difference in kind not in degree. It doesn't matter how many system 1's you deploy, you cannot unlock the capability of querying where any given face was observed across time and location.